Memorandum Of Association And Articles Of Association Of A Company Template for the United Arab Emirates
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What is a Memorandum Of Association And Articles Of Association Of A Company?
The Memorandum Of Association And Articles Of Association Of A Company is a mandatory requirement for company formation in the United Arab Emirates, prescribed by Federal Law No. 2 of 2015 (UAE Commercial Companies Law). This document serves multiple crucial purposes: it establishes the company's legal existence, defines its objectives and activities, sets out the rights and obligations of shareholders, and provides the framework for corporate governance. The document is required during the initial company registration process with the Department of Economic Development or relevant free zone authority, and continues to be relevant throughout the company's lifetime for reference in matters of corporate governance, shareholder disputes, and operational decisions. It must be drafted in both Arabic and English, and requires notarization by UAE authorities to be legally valid.
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Frequently Asked Questions
Is the Memorandum of Association and Articles of Association legally binding in the UAE?
Yes, the Memorandum of Association and Articles of Association are legally binding documents under UAE Federal Law No. 2 of 2015 (Commercial Companies Law). Once filed with the Department of Economic Development and approved, these documents become the constitutional foundation of your company and are enforceable by law. All shareholders, directors, and the company itself must comply with the provisions outlined in these documents.
Can my company be rejected if the Memorandum or Articles of Association are incomplete?
Yes, the Department of Economic Development will reject your company registration if the Memorandum of Association or Articles of Association are incomplete or non-compliant. Missing mandatory clauses, incorrect shareholding structures, or failure to meet UAE Commercial Companies Law requirements will result in application rejection. You must resubmit corrected documents, causing delays and additional costs.
How many UAE national shareholders are required in the Memorandum of Association?
Under UAE Federal Law No. 2 of 2015, most onshore companies require at least 51% UAE national ownership as specified in the Memorandum of Association. However, certain activities and free zone companies may have different ownership requirements. The exact shareholding structure must be clearly defined in the Memorandum and comply with the specific emirate's regulations where you're incorporating.
How is the Memorandum of Association different from a Partnership Agreement in the UAE?
The Memorandum of Association is required for limited liability companies and establishes a corporate entity with separate legal personality, while a Partnership Agreement governs partnerships where partners have personal liability. Under UAE law, the Memorandum creates a company structure with share capital and limited liability protection, whereas partnerships involve direct personal responsibility for business debts and obligations.
How long does it take to draft and approve Memorandum and Articles of Association in the UAE?
Drafting typically takes 3-5 business days with professional legal assistance, while government approval through the Department of Economic Development usually takes 5-10 business days after submission. The total process can extend to 2-3 weeks if revisions are required or if additional approvals are needed from specific authorities. Timeline varies by emirate and business activity type.
Why do UAE company registrations get rejected due to Articles of Association errors?
Common mistakes include incorrect minimum share capital amounts, non-compliant board composition requirements, missing mandatory clauses required by Federal Law No. 2 of 2015, and improper definition of business activities. Many applicants also fail to specify the correct registered office requirements or include prohibited business activities for their chosen company type, leading to automatic rejection.
Can I amend the Memorandum of Association after company registration in the UAE?
Yes, amendments to the Memorandum of Association are possible but require shareholder approval and Department of Economic Development consent. Changes to fundamental aspects like business activities, share capital, or ownership structure must follow specific procedures under UAE Commercial Companies Law. The amendment process typically takes 2-4 weeks and involves filing fees and updated documentation with relevant authorities.
About the Memorandum Of Association And Articles Of Association Of A Company
When establishing a company in the United Arab Emirates, you must prepare comprehensive founding documents that comply with UAE Commercial Companies Law. The Memorandum Of Association And Articles Of Association Of A Company serves as your company's constitutional framework, defining both its external relationships and internal governance structure under Federal Law No. 2 of 2015.
When do you need this document?
You require these documents when incorporating any form of company in the UAE, whether establishing a Limited Liability Company (LLC), Public Joint Stock Company (PJSC), or other corporate entities. The documentation is mandatory during the initial registration process with the Department of Economic Development or relevant free zone authority. You'll also need these documents when amending company objectives, changing shareholding structures, or adding new business activities. Additionally, banks, government authorities, and commercial partners regularly request these documents for verification of your company's legal status and authorized activities.
Key legal considerations
Your memorandum must clearly define the company's name in both Arabic and English, registered office address, and detailed business objectives that align with UAE economic activity classifications. The shareholding structure requires careful attention, particularly regarding foreign ownership limits under the Foreign Direct Investment Law, which now permits 100% foreign ownership in specific sectors. Articles of association must establish clear governance procedures, including board composition, voting rights, profit distribution mechanisms, and decision-making processes. You must ensure compliance with Economic Substance Regulations if your company engages in relevant activities, requiring demonstration of adequate commercial substance in the UAE. The documents must address manager appointment procedures, signature authorities, and audit requirements as mandated by UAE Commercial Transactions Law.
Legal requirements in United Arab Emirates
UAE law requires both documents to be prepared in Arabic and English versions, with the Arabic text taking precedence in case of conflicts. All founding shareholders must provide complete identification details including passport information for foreign nationals or Emirates ID for UAE residents. The registered office must be a physical address within the UAE jurisdiction where you're incorporating, not a post office box. Your business objectives must be specific and align with approved economic activities under UAE licensing classifications. The documents require notarization by UAE authorities and official stamping before submission to registration authorities. Minimum share capital requirements vary by company type and must be clearly stated, with LLC requiring AED 300,000 minimum capital. You must appoint a UAE resident manager for LLCs or ensure board representation meets local requirements for joint stock companies. The documentation must include provisions for annual audit requirements and compliance with UAE accounting standards.
GOVERNING LAW
Applicable law
This Memorandum Of Association And Articles Of Association Of A Company is drafted to comply with United Arab Emirates law. Key legislation includes:
UAE Commercial Transactions Law (Federal Law No. 18 of 1993): Regulates commercial transactions and business activities, affecting various provisions that need to be included in company formation documents
Foreign Direct Investment Law (Federal Law No. 19 of 2018): Governs foreign ownership of UAE companies and activities permitted for foreign investors, which affects shareholding provisions in the MOA
Economic Substance Regulations (Cabinet Resolution No. 31 of 2019): Requires certain UAE entities to maintain economic substance in the UAE, affecting operational commitments in company documents
Ultimate Beneficial Owner Regulations (Cabinet Resolution No. 58 of 2020): Requires disclosure and documentation of ultimate beneficial owners, affecting shareholding transparency requirements
UAE Anti-Money Laundering Law (Federal Decree Law No. 20 of 2018): Impacts provisions related to compliance, reporting requirements, and internal controls that should be reflected in company documents
UAE Bankruptcy Law (Federal Law No. 9 of 2016): Influences provisions related to company dissolution, liquidation procedures, and financial distress situations
UAE Labor Law (Federal Law No. 8 of 1980): Affects provisions related to employment matters and management structure in the Articles of Association
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